legal due diligence by abe20

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									Due Diligence Management
John A. Earles

What is Due Diligence?
Due Diligence is the process by which business, legal and financial information is collected about a company involved in a corporate transaction.

Business Due Diligence
• Interview management team and key employees. • Conduct on-site investigations. • Obtain customer references.

Legal Due Diligence: Why do we do it?

Legal Due Diligence: Why do we do it?
• Ensure complete and accurate disclosure.

Legal Due Diligence: Why do we do it?
• Ensure complete and accurate disclosure. • Identify weaknesses.

Legal Due Diligence: Why do we do it?
• Ensure complete and accurate disclosure. • Identify weaknesses. • Identify strengths.

Legal Due Diligence: Why do we do it?
• Ensure complete and accurate disclosure. • Identify weaknesses. • Identify strengths. • “Due Diligence Defense.”

Legal Due Diligence: Who participates?
• • • • • Company Company Counsel Underwriters Underwriters’ Counsel Other parties

Due Diligence Process

Due Diligence Process
• Step 1: Requesting information.

Due Diligence Process
• Step 1: Requesting information. • Step 2: Gathering information.

Due Diligence Process
• Step 1: Requesting information. • Step 2: Gathering information. • Step 3: Reporting on information.

Due Diligence Process
• • • • Step 1: Requesting information. Step 2: Gathering information. Step 3: Reporting on information. Step 4: Repeat as necessary.

Due Diligence Process: Step 1: Requesting Information
DUE DILIGENCE DOCUMENT AND INFORMATION REQUEST LIST The following is a list of documents and information Morris, Manning & Martin, LLP, as counsel to ABC, Inc. (the “Company”) and Dewey Cheatem & Howe, as counsel to Underwriters, Inc., would like to review in connection with the proposed public offering by the Company. To the extent any of the information or documents are not applicable or available, please so state in writing. The following requests should include oral as well as written understandings. To expedite the “due diligence” process, please mark documents delivered to correspond to the following list. If information or documents are provided in response to more than one item on the following list, please so indicate in the response. Please note that items may subsequently be added, deleted or modified as appropriate as our due diligence review progresses. Copies of summaries may be sent where the reproduction of copies is not feasible. In order to expedite matters, please send materials as soon as they are available, rather than waiting until all materials in any one category are assembled before sending out such materials. If you have any questions, please call John Earles at (404) 504-7612. A. 1. 2. 3. 4. CORPORATE DATA AND HISTORY Furnish a copy of the Articles of Incorporation of the Company, complete with all amendments thereto. Furnish a copy of the Bylaws of the Company. List each state and county in which the Company is required to be qualified or otherwise licensed to transact business, and provide a copy of good standing and tax certificate from each such jurisdiction. List each jurisdiction (including jurisdictions outside the United States), other than those set forth above, in which the Company does any of the following:

Due Diligence Process: Step 1: Requesting Information
QUESTIONNAIRE TO DIRECTORS AND OFFICERS The following questions seek information necessary to complete certain filings and reports that ABC, Inc. (the “Company”) is required to file pursuant to various requirements of federal and state securities laws. Most of the questions address Securities and Exchange Commission (“SEC”) concerns regarding the relationship of a publicly held entity to its officers and directors. Other questions, particularly those found under the “Legal Proceedings” section, reflect the SEC’s belief that involvement in certain legal proceedings should be disclosed, as such involvement may be material to an evaluation of the ability or integrity of an officer or director. Questions requiring lengthy answers may be answered on separate pages and attached to the Questionnaire. The completed Questionnaire should be returned for receipt by May 16, 2004 to Heath D. Linsky, Esq. Morris, Manning & Martin, LLP 1600 Atlanta Financial Center 3343 Peachtree Road, N.E. Atlanta, Georgia 30326 by overnight delivery or facsimile. Should you choose to return this Questionnaire by facsimile, please also forward the original to the above address as soon as possible thereafter. The number for facsimile transmittal is (404) 3659532. Should you have questions concerning any part of the Questionnaire, please call Heath D. Linsky of Morris, Manning & Martin, LLP, counsel to the Company, at (404) 504-7691. BIOGRAPHICAL INFORMATION (a) Please state your full name and address: (Name)

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Due Diligence Process: Step 2: Gathering Information
• Use of Data Room • Electronic/Virtual Data Room • Document Distribution

Due Diligence Process: Step 3: Reporting Information
Confidential Draft; For Discussion Purposes Only 06/17/04 08:52 PM DUE DILIGENCE REVIEW REPORT This Due Diligence Review Report provides a summary of our review of documents relating to the proposed initial public offering of ABC, Inc. (the “Company”). Documents are listed according to the Due Diligence Request List attached hereto as Exhibit A. A. CORPORATE DATA AND HISTORY 1. Certificate of Incorporation. The Company filed an Amended and Restated Certificate of Incorporation on April 5, 2000. The Amended and Restated Certificate of Incorporation states that the original Certificate of Incorporation was filed on January 24, 2000 with the Secretary of State of the State of Delaware. Pursuant to a Certificate of Amendment of the Amended and Restated Certificate of Incorporation, which was filed on June 15, 2000, the Company has the authority to issue 40,000,000 shares of stock, including 31,000,000 shares of common stock, par value $.01 per share, and 9,000,000 shares of preferred stock, par value $.01 per share of which all will be designated Series A Preferred Stock. The Amended and Restated Certificate of Incorporation also includes the rights, preferences, privileges and restrictions of the common and preferred stock. The Company did not provide evidence of the adoption of either the Certificate of Incorporation, the Amended and Restated Certificate of Incorporation or the Certificate of Amendment of the Amended and Restated Certificate of Incorporation.

MMM Due Diligence Management Goals

MMM Due Diligence Management Goals
• Minimize disruptions to Company while maximizing quality of disclosure.

MMM Due Diligence Management Goals
• Minimize disruptions to Company while maximizing quality of disclosure. • Identify issues prior to identification by underwriters’ counsel.

MMM Due Diligence Management Goals
• Minimize disruptions to Company while maximizing quality of disclosure. • Identify issues prior to identification by underwriters’ counsel. • Resolve issues through use of specialists.


								
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